AT&T Deal Illustrates Demise of Yellow Page Industry

Apr 11, 2012Filed under:

AT&T closed a deal on Monday that will get the telecom giant out of the rapidly dying yellow page business. A private equity firm by the name of Cerberus Capital Management bought AT&T's stake for less than $1 billion dollars and will ride out the Yellow Page for whatever it can get, without the public pressure of stockholders.

As reported in The Washington Times on Monday:
"The digital side of the business listings industry has been eating away at the print phone directory market. Yellow Pages is still valued higher than online competitors like Yelp and Angie's List, but the gap is closing.

"Revenue in the worldwide yellow page industry is down 27 percent from 2007's $32 billion to $23.3 billion last year, according to a new BIA/Kelsey study.

"Moving forward, Cerberus will focus on the digital nature of the business, the source familiar with the situation said."

This reinforces several important points we've been trumpeting for a while. For one, Yellow Pages are basically a 20th century relic. There are a few niche industries that continue to benefit, but for an increasing number of businesses, it's the equivalent of highway robbery.

Furthermore, AT&T only collected 25%-33% of what it would have collected just a few years ago. This shows just how fast the phone book has transformed from a desktop essential to a landfill burden.

Finally, it concedes that search engines like Google and YouTube long since have supplanted digital yellow page options when it comes to online and smartphone searches. This underscores the importance of strong SEO for businesses both local and national.